Dollar hits 6-month high vs euro; tech stocks up
HONG KONG (Reuters) - The U.S. dollar rose to a six-month high against the euro on Thursday, on signs the Federal Reserve is more confident about a recovery, while Asian equities were on track to snap a nine-day losing streak.
U.S. stock futures rose during Asian session after U.S. President Barack Obama in an address to Congress had a more moderate tone on restrictions toward U.S. banks.
Obama also promised to double exports in the next five years.
In a positive development for risk taking, technology shares, which have been leading the broader Asian market lower, reversed course and were up nearly 1 percent across the region, supported by the outlook for earnings.
U.S. Treasuries were steady, holding most of the gains in shorter-maturity yields after a Fed policy meeting overnight. One hawkish Fed member surprised the market by dissenting to a decision to remove a phrase from a statement saying rates would be kept low for an extended period.
It seems like it is going to be a mixed picture ahead, said economists with United Overseas Bank in a note.
There would be some in the markets convinced that the Fed will keep rates low for an extended period; yet on the other hand, there will be a handful taking signals that within the Fed, a gradual movement toward a more normal monetary policy stance, perhaps, is starting to emerge.
* The euro fell to a low below $1.3940 before cutting losses to $1.4000, while the ICE U.S. dollar index, which measures its performance against six major currencies, was up 0.2 percent, after earlier hitting the highest since September 2009.
* The yield on the 2-year U.S. Treasury note was steady at around 0.9185 percent after jumping 11 basis points overnight.
* The spread of the benchmark 2-year euro zone government bond yield over the 2-year U.S. yield narrowed to 24 basis points, the smallest so far in January, after dropping 6 basis points on Wednesday.
* The MSCI index of Asia Pacific stocks outside Japan was up 0.4 percent though was still down 5.5 percent so far in January.
* The tech sector was providing the biggest support to the index, rising 1.3 percent. The sector has had the biggest upgrades in earnings estimates of any other segment over the last 30 days, up 4.6 percent, while valuations have actually contracted in the period.
* Japan's Nikkei share average was up 1.3 percent, helped by reports of robust earnings growth from Honda Motor Co, whose stock jumped 4.9 percent.
* Shares of Toyota Motor Co extended a decline to 13 percent over the past week after having to suspend sales of some best-selling vehicles in the U.S. market because of safety issues.
* The stronger U.S. dollar weighed on raw materials prices. Copper traded in Shanghai was down 3.6 percent, after three-month copper on the London Metal Exchange dropped around 4.7 percent on Wednesday.
(Editing by Kazunori Takada)
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